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The Case for Governments Using Open Contract Bidding

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The process of creating and building a structure requires a different approach as a consumer. I’m arguing that the government should do contract bidding in the marketplace and be transparent with the people.

As a regular consumer, if you have a problem with your car, you can go pick up the parts online, take it to a variety of different mechanics and service it in the future at a different location. A consumer can look around at a variety of features, benefits, prices, timelines and a near infinite amount of other metrics.

What is Contract Bidding?

When it comes to buildings, infrastructure and many of the items that the government builds there is a different approach. The way it works with private business is that they solicit bids from private contractors for various stages of the process. For example, architects will be contacted and will provide a cost to design, a timeline, a portfolio and whatever other information the government requests of them. This works for a variety of disciplines; the architect designs the building, the structural engineer designs the strutural requirements, the mechanical and electrical design more of the nervous system of the building.

And this is just the process of design. When it is designed, again another solicitation of bidding occurs for the contractors that put the designs together. Things like plumbers, electricians, HVAC, carpenters, general contractor and on and on.

Contract bidding is the equivalent of shopping around for the best deal. Best is described as the desired metrics by the client (government). That doesn’t necessarily mean the cheapest price, but if desired this would be the way to find it.

If Contract Bidding isn't used, what is done?

When the government doesn’t have a bidding process it essentially picks someone. This act alone doesn’t necessarily show corruption, as private developers sometimes do the same thing. For example, if you work with an architect that you like, you may just want to use them (though typically bids are still solicited, most of the time, to ensure price competitiveness).

You can probably guess what happens with a corrupt government, they hand off the job to a friend or political ally at an inflated cost to taxpayers. The biggest issue, even when the process isn’t even corrupt, is that there are no means to justify the choice to taxpayers. For example, the Peace Bridge in Calgary was a no-bid contract. The city wanted to use the Spanish architect Santiago Calatrava, who is well known and expensive (he’s earned it), but how does the city justify the choosing metrics - other than just vanity? How does a taxpayer know that they got their monies worth at $30,400 per sq. foot? The Peace Bridge, a pedestrian bridge, is one of the most expensive (per square meter) pedestrian bridges in the world - precisely because there was no bidding process.

Contract Bidding Isn't Enough - Transparency is needed

The bidding process doesn’t provide any immunity from overspending or corruption. Bids can still be solicited and contracts awarded to political allys. Bids are always selected on a quality metric defined by the client (the government). The cheapest bid isn’t (and shouldn’t) be automatically selected. This bid may contain an unexceptable timeline, an inexperienced contractor or even the general belief that the work could be done at that price.

Transparency makes bids public. That doesn’t mean that bids are made public prior to being awarded - as this provides unfair advantages. When the bids are released after being awarded (how long? I don’t know what would be appropriate) this allows the media and taxpayers to question it. This means that politicians will have to justify the choice. Why did they choose bid #1 over bid #2? Well, because of metrix A, B and C.

Conclusion

When the choice to have a bidding process versus no bidding process, the best choice for taxpayers is bidding. Bidding alone gives better options for politicians/bureaucrats to make decisions. The bidding process alone isn’t enough to weasle out corruption from the process. The only way to do this is by making the bids public, eventually, which requires politicians/bureaucrats to explain why chose the winning bidder, but why they chose it over other options.